`
`FORM 10-K
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`(Annual Report)
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`Filed 02/16/16 for the Period Ending 12/31/15
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`Telephone
`CIK
`SIC Code
`Fiscal Year
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`44 0 1707 853 000
`0001623613
`2834 - Pharmaceutical Preparations
`12/31
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`http://www.edgar-online.com
`© Copyright 2016, EDGAR Online, Inc. All Rights Reserved.
`Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
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`ICOS Exhibit 2003
`Mylan v. ICOS
`IPR2017-00323
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, DC 20549
`FORM 10-K
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`þ
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`¨
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`Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
`For the Fiscal Year Ended December 31, 2015
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`OR
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`Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
`For the transition period from to .
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`Commission file number 333-199861
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`MYLAN N.V.
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`(Exact name of registrant as specified in its charter)
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`The Netherlands
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`98-1189497
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`(I.R.S. Employer Identification No.)
`(State or other jurisdiction of incorporation or organization)
`Building 4, Trident Place, Mosquito Way, Hatfield, Hertfordshire, AL10 9UL, England
`(Address of principal executive offices)
`+44 (0) 1707-853-000
`(Registrant’s telephone number, including area code)
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`Securities registered pursuant to Section 12(b) of the Act:
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`Title of Each Class:
`Ordinary shares, nominal value €0.01
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`Name of Each Exchange on Which Registered:
`The NASDAQ Stock Market
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`Securities registered pursuant to Section 12(g) of the Act: None
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ
` No ¨
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨
` No þ
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
`preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
`90 days. Yes þ
` No ¨
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
`submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
`required to submit and post such files). Yes þ
` No ¨
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be
`contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
`Form 10-K. þ
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
`“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:
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`Large accelerated filer
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`þ
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` Accelerated filer
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`¨
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`¨
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` Smaller reporting company
`(Do not check if a smaller reporting company)
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`Non-accelerated filer
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨
` No þ
`The aggregate market value of the outstanding ordinary shares, nominal value €0.01 , of the registrant other than shares held by persons who may be deemed affiliates of
`the registrant, as of June 30, 2015 , the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $33,063,308,366 .
`The number of ordinary shares outstanding, nominal value €0.01 , of the registrant as of February 8, 2016 was 490,687,866 .
`INCORPORATED BY REFERENCE
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`¨
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`Document
`An amendment to this Form 10-K will be filed no later than 120 days after the close of registrant’s fiscal year.
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`Part of Form 10-K into Which
`Document is Incorporated
`III
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`MYLAN N.V.
`INDEX TO FORM 10-K
`For the Year Ended December 31, 2015
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`PART I
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`ITEM 1.
`ITEM 1A.
`ITEM 1B.
`ITEM 2.
`ITEM 3.
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`ITEM 5.
`ITEM 6.
`ITEM 7.
`ITEM 7A.
`ITEM 8.
`ITEM 9.
`ITEM 9A.
`ITEM 9B.
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`ITEM 10.
`ITEM 11.
`ITEM 12.
`ITEM 13.
`ITEM 14.
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`ITEM 15.
`Signatures
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`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
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`PART II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Selected Financial Data
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures about Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
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`PART III
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accounting Fees and Services
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`PART IV
`Exhibits and Consolidated Financial Statement Schedules
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`ITEM 1.
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`Business
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`PART I
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`Mylan N.V. , along with its subsidiaries (collectively, the “Company,” “ Mylan ,” “our” or “we”), is a leading global pharmaceutical company, which
`develops, licenses, manufactures, markets and distributes generic, branded generic and specialty pharmaceuticals. Mylan is committed to setting new standards in
`healthcare by creating better health for a better world, and our mission is to provide the world’s 7 billion people access to high quality medicine. To do so, we
`innovate to satisfy unmet needs; make reliability and service excellence a habit; do what's right, not what's easy; and impact the future through passionate global
`leadership.
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`Mylan offers one of the industry’s broadest product portfolios, including more than 1,400 marketed products, to customers in approximately 165 countries
`and territories. We operate a global, high quality vertically-integrated manufacturing platform, which includes more than 50 manufacturing and research and
`development (“R&D”) facilities around the world and one of the world’s largest active pharmaceutical ingredient (“API”) operations. We also operate a strong and
`innovative R&D network that has consistently delivered a robust product pipeline including a variety of dosage forms, therapeutic categories and biosimilars.
`Additionally, Mylan has a specialty pharmaceutical business that is focused on respiratory and allergy therapies.
`
`Overview
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`Throughout its history, Mylan has been recognized as a leader in the United States (“U.S.”) generic pharmaceutical industry. Our leadership position is the
`result of, among other factors, our ability to efficiently obtain Abbreviated New Drug Application (“ANDA”) approvals and our reliable high quality supply chain.
`Mylan is one of the largest generic and specialty pharmaceuticals companies in the world today in terms of revenue and is recognized as an industry leader because
`of our organic growth and transformative acquisitions beginning in 2007.
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`On July 13, 2014 , Mylan N.V. and Mylan Inc. entered into a definitive agreement, as amended on November 4, 2014 , with Abbott Laboratories (“
`Abbott ”) to acquire Abbott’s non-U.S. developed markets specialty and branded generics business (the “ EPD Business ”) in an all-stock transaction. In connection
`with the closing of the acquisition on February 27, 2015 (the “ EPD Transaction Closing Date ”), Abbott transferred the EPD Business to Mylan N.V. in exchange
`for 110 million ordinary shares of Mylan N.V. Mylan Inc. became an indirect wholly owned subsidiary of Mylan N.V. , and Mylan Inc.’s outstanding common
`stock was exchanged on a one to one basis for Mylan N.V. ordinary shares.
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`The purchase price for the acquired EPD Business , which was on a debt-free basis, was $6.3 billion based on the closing price of Mylan Inc.’s stock as of
`the EPD Transaction Closing Date , as reported by the NASDAQ Global Select Stock Market . On the EPD Transaction Closing Date , Mylan N.V. , Abbott and
`Abbott Shareholders entered into a shareholder agreement. Following an underwritten public offering of Abbott Shareholders of a portion of Mylan N.V. ’s
`ordinary shares held by them, which closed on April 6, 2015, the Abbott Shareholders currently own approximately 14.2% of Mylan N.V. ’s outstanding ordinary
`shares. The acquired EPD Business enhanced our already expansive product portfolio by more than 100 specialty and branded generic pharmaceutical products in
`five major therapeutic areas and included several patent protected, novel and/or hard-to-manufacture products. Additionally, we significantly expanded and
`strengthened our presence in Europe, Japan, Canada, Australia and New Zealand.
`
`On November 20, 2015, we completed the acquisition of certain female healthcare businesses from Famy Care Limited (such businesses “ Jai Pharma
`Limited ”), a specialty women’s healthcare company with global leadership in generic oral contraceptive products, through our wholly owned subsidiary Mylan
`Laboratories Limited (“Mylan India”) for a cash payment of $750 million plus additional contingent payments of up to $50 million for the filing for approval with,
`and receipt of approval from, the U.S. Food and Drug Administration (“FDA”) of a product under development with Jai Pharma Limited .
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`In accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the Company used the purchase method of
`accounting to account for this transaction. Under the purchase method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at
`their respective estimated fair values at the acquisition date. The U.S. GAAP purchase price was $711.1 million , which excludes the $50 million paid into escrow
`at closing that is contingent upon at least one of two principal former shareholders of Jai Pharma Limited continuing to provide consulting services to the acquired
`business for the two year post-closing period and will be treated as compensation expense over the service period. The U.S. GAAP purchase price also excludes $7
`million of working capital and other adjustments and includes estimated contingent consideration of approximately $18 million related to the $50 million
`contingent payment. With
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`this transaction, we have significantly broadened our women’s care portfolio and strengthened our technical and manufacturing capabilities.
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`Through these transactions, along with our previous transformative acquisitions of Agila Specialties (‘‘ Agila ’’), Mylan India, Merck KGaA’s generics
`and specialty pharmaceutical business, Bioniche Pharma Holdings Limited (“ Bioniche Pharma ”) and Pfizer Inc.’s respiratory delivery platform (the “respiratory
`delivery platform”), we have created a horizontally and vertically integrated platform with global scale, augmented our diversified product portfolio and further
`expanded our range of capabilities, all of which we believe position us well for the future.
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`Today, in addition to the U.S., Mylan has a robust worldwide commercial presence in the generic pharmaceutical market, including leadership positions in
`Australia, several key European markets such as France and Italy, as well as other markets around the world. Mylan also is a leader in branded specialty
`pharmaceuticals focusing on respiratory and allergy products.
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`Currently, Mylan ’s global portfolio of more than 1,400 different marketed products covers a vast array of therapeutic categories. We offer an extensive
`range of dosage forms and delivery systems, including oral solids, topicals, liquids and semisolids while focusing on those products that are difficult to formulate
`and manufacture, and typically have longer life cycles than traditional generic pharmaceuticals, including transdermal patches, high potency formulations,
`injectables, controlled-release and respiratory products. In addition, we offer a wide range of antiretroviral therapies (“ARVs”), upon which nearly 50% of patients
`being treated for HIV/AIDS in developing countries depend. Mylan also operates one of the largest API manufacturers, supplying low cost, high quality API for
`our own products and pipeline as well as for a number of third parties.
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`We believe that the breadth and depth of our business and platform provide certain competitive advantages in major markets in which we operate,
`including less dependency on any single market or product. As a result, we are better able to successfully compete on a global basis than compared to many of our
`competitors.
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`Our Operations
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`Mylan N.V. was originally incorporated as a private limited liability company, New Moon B.V., in the Netherlands in 2014. Mylan became a public
`limited liability company in the Netherlands through its acquisition of the EPD Business on February 27, 2015 . Mylan’s corporate seat is located in Amsterdam,
`the Netherlands , its principal executive offices are located in Hatfield, Hertfordshire, England and Mylan N.V. group’s global headquarters are located in
`Canonsburg, Pennsylvania . Mylan operates in two segments, “Generics” and “Specialty.” Our revenues are derived primarily from the sale of generic and branded
`generic pharmaceuticals, specialty pharmaceuticals and API. Our generic pharmaceutical business is conducted primarily in the U.S. and Canada (collectively,
`“North America”); Europe; and India, Australia, Japan, New Zealand and Brazil as well as our export activity into emerging markets (collectively, “Rest of
`World”). Our API business is conducted through Mylan India , which is included within Rest of World in our Generics segment. Our specialty pharmaceutical
`business is conducted by Mylan Specialty L.P. (“ Mylan Specialty ”). Refer to Note 13 Segment Information included in Item 8 in this Form 10-K for additional
`information related to our segments, including our geographic markets.
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`Our global operational footprint, including the locations of our manufacturing and R&D facilities and capabilities, along with the individual site’s primary
`activities, are detailed on the map below.
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`Our global manufacturing platform is an important component of our business model. We own seven production, distribution and warehousing facilities in
`the U.S. including Puerto Rico, including significant production and distribution sites in Morgantown, West Virginia; St. Albans, Vermont; Caguas, Puerto Rico;
`and Greensboro, North Carolina. Outside the U.S. and Puerto Rico, we own production, distribution and warehousing facilities in nine countries, including key
`facilities in India, Australia, Japan, Ireland, Brazil, Hungary and France. Through our manufacturing facilities in which we operate around the globe, we have a
`manufacturing capacity capable of producing approximately 65 billion oral solid doses, 3,600 kiloliters of APIs, 500 million injectable units, 260 million patches
`and 15 million semisolid units per year.
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`The Company also leases warehousing, distribution and administrative facilities in numerous locations, within and outside of the U.S., including
`properties in New York, France, India, Ireland and the United Kingdom (the “U.K.”). All of the production, distribution and warehousing facilities are included
`within the Generics segment; however, certain locations also support our Specialty segment. Our global R&D centers of excellence are located in Morgantown,
`West Virginia, Hyderabad, India and Sandwich, U.K. We also have specific technology focused development sites in Vermont, Ireland, India and Japan.
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`We believe that all of our facilities are in good operating condition, the machinery and equipment are well-maintained, the facilities are suitable for their
`intended purposes and they have capacities adequate for the current operations.
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`Generics Segment
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`Our Generics segment primarily develops, manufactures, sells and distributes generic or branded generic pharmaceutical products in tablet, capsule,
`injectable, transdermal patch, gel, cream or ointment form, as well as API. For the year ended December 31, 2015 , Generics segment third party net sales were
`$8.16 billion . Our Generics segment operates within three geographical regions: North America, Europe and Rest of World. The chart below reflects third party
`net sales by region for the year ended December 31, 2015 .
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`North America
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`Of our broad global product portfolio of more than 1,400 products, we market approximately 610 of these products throughout North America. The
`U.S. generics market is the largest in the world, with generic prescription sales of $61.3 billion for the twelve months ended November 2015 . In terms of generic
`prescription volume, approximately 77% of all pharmaceutical products sold in the U.S. are generic products, which demonstrates the high level of generic
`penetration in this market. Mylan holds the number two ranking in the U.S. generics prescription market both in terms of sales and prescriptions dispensed.
`Approximately one in every 13 prescriptions dispensed in the U.S. is a Mylan product. Our sales of products in the U.S. are derived primarily from the sale of oral
`solid dosages, injectables, transdermal patches, gels, creams, ointments and unit dose offerings. In the U.S., we have one of the largest product portfolios among all
`generic pharmaceutical companies, consisting of approximately 430 products, of which approximately 330 are in capsule or tablet form, in an aggregate of
`approximately 950 dosage strengths. Included in these totals are approximately 50 extended-release products in a total of approximately 125 dosage strengths.
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`We manufacture and sell a diverse portfolio of injectable products across several key therapeutic areas, including antineoplastics, anti-infectives,
`anesthesia/pain management and cardiovascular. Our product offerings include a diverse portfolio of approximately 70 injectable branded and generic products, in
`an aggregate of approximately 90 dosage strengths. As of December 31, 2015 , approximately 108 injectable products have been filed and are pending ANDA
`approval for the U.S. market. Mylan’s injectable manufacturing capabilities include vials, pre-filled syringes, ampoules and lyophilization with a focus on
`antineoplastics, penems, penicillins, ophthalmics and peptides.
`
`Our unit dose business focuses on providing one of the largest product portfolios along with innovative packaging and barcoding that supports bedside
`verification throughout the U.S. and Canada for hospitals, group purchasing organizations (“GPOs”), long term care facilities, wholesalers, surgical services, home
`infusion service providers, correctional facilities, specialty pharmacies and retail outlets. In addition, we market approximately 165 generic products in a total of
`approximately 340 dosage strengths from our U.S. product portfolio under supply and distribution agreements with wholesalers. Also, included in our U.S. product
`portfolio are seven transdermal patch products in approximately 30 dosage strengths, including our Fentanyl Transdermal System.
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`We believe that the breadth and quality of our product offerings help us to successfully meet our customers’ needs and to better compete in the generics
`industry over the long-term. The future growth of our U.S. generics business is partially dependent upon continued acceptance of generic products as affordable
`alternatives to branded pharmaceuticals, a trend which is largely outside of our control. However, we believe that we can maximize the profitability of our generic
`product opportunities by continuing our proven track record of bringing to market high quality products that are difficult to formulate or manufacture. Throughout
`Mylan’s history, we have successfully introduced many generic products that are difficult to formulate or manufacture and continue to be meaningful contributors
`to our business several years after their initial launch. Additionally, we expect to achieve growth in our U.S. business by launching new products for which we may
`attain FDA first-to-file status with Paragraph IV certification. As described further in the “Product Development and Government Regulation” discussion below, a
`first-filed ANDA with a Paragraph IV certification qualifies the product approval holder for a period of generic marketing and distribution exclusivity.
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`In Canada , we have successfully leveraged the acquired EPD Business allowing us to further broaden our presence in this market. We currently rank
`seventh in terms of market share in the generic prescription market and Mylan products are sold in eight out of ten pharmacies in Canada. As in the U.S., growth in
`Canada will be dependent upon acceptance of generic products as affordable alternatives to branded pharmaceuticals. Further, we plan to leverage the strength and
`reliability of the collective Mylan brand to foster continued brand awareness and growth throughout the region.
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`Europe
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`Our generic pharmaceutical sales in Europe are generated primarily by our wholly owned subsidiaries, through which we have operations in 27 countries.
`Of our broad global product portfolio of more than 1,400 products, we market approximately 830 of these products throughout Europe. The types of markets within
`Europe vary from country to country; however, when combined, the European market is the second largest generic pharmaceutical market in the world in terms of
`value. Within Europe, by value, the generic prescription market in Germany is the largest , followed by the U.K., France, Spain and Italy, respectively.
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`In Europe, the manner in which products are marketed varies by country. In addition to selling pharmaceuticals under their International Nonproprietary
`Name (“INN”) (i.e., API), in certain European countries, there is a market for both branded generic products and “company-branded” generic products. Branded
`generic pharmaceutical products are given a unique brand name, as these markets tend to be more responsive to the promotion efforts generally used to promote
`brand products. Company-branded products generally consist of the name of the active ingredient with a prefix or suffix of the company’s name, either in whole or
`in part.
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`The European generic prescription market also varies significantly by country in terms of the extent of generic penetration, the key decision maker in
`terms of drug choice and other important aspects. Some countries, including Germany, the U.K., the Netherlands and Poland, are characterized by relatively high
`generic penetration, ranging between 68% and 74% of total prescription market sales in the twelve months ended November 2015 , based on volume. Conversely,
`other major European markets, including France, Italy and Spain, are characterized by much lower generic penetration, ranging between 20% and 42% of total
`prescription sales in the twelve months ended November 2015 , based on volume. However, actions taken by governments, particularly in these latter under-
`penetrated countries, to reduce healthcare costs could encourage further use of generic pharmaceutical products. In each of these under-penetrated markets, in
`addition to growth from new product launches, we expect our future growth to be driven by increased generic utilization and penetration.
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`As a result of the acquired EPD Business, Mylan has significantly expanded and strengthened its presence in Europe. In particular, we have grown our
`presence in several markets in Central and Eastern Europe, including Poland, Greece, the Czech Republic and Slovakia and gained access into new markets, such
`as Romania, Bulgaria, the Baltics and the Balkan States. Of the top ten generic prescription markets in Europe, we hold leadership positions in several of the
`markets, including the number one market share position in France and the number two market share position in Italy. In France , we have the highest market share
`in the generic market, with a share of approximately 28% . Our future growth in the French market is expected to come primarily from new product launches and
`increased generic utilization and penetration through government initiatives. In addition, the acquired EPD Business has allowed us to broaden our presence in this
`market by strengthening and growing our relationships with general practitioners and pharmacists, our primary customers in this market.
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`In Italy , we have the second highest market share in the company-branded generic prescription market, with a share of approximately 19% in terms of
`volume and value. We believe that the Italian generic market is still under-penetrated, with company-branded generics representing approximately 20% of the
`Italian pharmaceutical market, based on volume. The Italian government has put forth only limited measures aimed at encouraging generic use, and as a result,
`generic substitution is still in its early stages. Our growth in the Italian generics market will be fueled by increasing generic utilization and penetration and new
`product launches.
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`In addition to France and Italy, the acquired EPD Business has further grown our presence in several European markets including the U.K., Spain and
`markets in Eastern Europe. In the U.K. , Mylan is ranked third in the U.K. generic prescription market, in terms of value, with an estimated market share of
`approximately 8% . Mylan is well positioned in the U.K. as a preferred supplier to wholesalers and is also focused on areas such as multiple retail pharmacies and
`hospitals. The acquisition of the EPD Business in the U.K. has provided us with an additional branded off-patent market presence, particularly in the areas of
`pancreatic enzyme replacement therapy and hormone replacement therapy. The U.K. generic prescription market is highly competitive, and any growth in the
`market will stem from new product launches; however, we do expect that the value will continue to be affected by price erosion.
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`In Spain , we have the seventh highest market share in the company-branded generic prescription market. The company-branded generic market
`comprised approximately 35% of the total Spanish pharmaceutical market by volume for the twelve months ended November 2015 . Within the overall Spanish
`pharmaceutical market, our position has expanded due to the acquired EPD Business. We view further generic utilization and penetration of the Spanish market to
`be a key driver of our growth in this country.
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`We have a notable presence in other European generic prescription markets, including Portugal and Belgium, where we hold the third and fifth highest
`market share, respectively, in terms of value. In the Netherlands, we have the fourth highest market share in the generic prescription market, which is characterized
`by relatively high generic penetration.
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`Rest of World
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`We market generic pharmaceuticals in Rest of World through our subsidiaries in India, Australia, Japan, New Zealand and Brazil. Additionally, we have
`an export business which is focused on countries in Africa and emerging markets throughout the world, and through Mylan India , we market API to third parties
`and also supply other Mylan subsidiaries. Of our broad global product portfolio of more than 1,400 products, we market approximately 640 of these products
`throughout Rest of World.
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`The Indian generics market is the second largest in the world, behind the U.S., in terms of volume. In India , we are one of the world's largest API
`manufacturers as measured by the number of drug master files (“DMFs”) filed with regulatory agencies. Mylan India ’s manufacturing capabilities include a range
`of dosage forms, such as tablets, capsules and injectables, in a wide variety of therapeutic categories. Mylan India has nine API and intermediate manufacturing
`facilities, eight oral solid dose (“OSD”) facilities and eight injectable facilities, for a total of sixteen finished dosage form (“FDF”) facilities, all located in India.
`Our presence in India goes beyond manufacturing, sales and marketing. With a global R&D center of excellence in Hyderabad, India and technology driven R&D
`sites in Bangalore, India and Ahmedabad, India, we are able to create unique and efficient R&D capabilities.
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`Mylan India markets high quality API to third parties around the world and ARV products for people living with HIV/AIDS. In addition, Mylan India has
`a growing commercial presence, our current franchises include Critical Care, Hepato Care, HIV Care, Onco Care and Women’s Care. We have expanded our
`products from therapeutic categories such as oncology and critical care. In November 2015, we completed our acquisition of Jai Pharma Limited, which
`significantly broadened our women’s care portfolio and strengthened our technical capabilities in terms of dedicated hormone manufacturing.
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`In Australia , we have the highest market share in the generic pharmaceutical market, with an estimated 32% market share by volume. Mylan is the
`number one supplier by volume to Australia’s national pharmaceuticals program. The acquired EPD Business has enabled Mylan to broaden its product portfolio in
`this market. The generic pharmaceutical market in Australia had sales of approximately $1.4 billion during the twelve months ended November 2015 .
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`Japan is the second largest pharmaceutical market in the world by value, behind the U.S., and the sixth largest generic prescription market worldwide by
`value, with sales of approximately $6.0 billion during the twelve months ended November 2015 . Beginning in 2013, we established an exclusive long-term
`strategic collaboration with Pfizer Japan Inc. (“Pfizer Japan”) to develop, manufacture, distribute and market generic drugs in Japan. Under the agreement, both
`parties operate separate legal entities in Japan and collaborate on current and future generic products, sharing the costs and profits resulting from such
`collaboration. Mylan ’s responsibilities, under the agreement, primarily consist of managing operations, including R&D and manufacturing. Pfizer Japan’s
`responsibilities primarily consist of the commercialization of the combined generics portfolio and managing a combined marketing and sales effort. The Japanese
`government has stated that it now intends to grow the generic share to at least 70% by mid-2017 and to at least 80% at the earliest possible date between 2018 and
`the end of 2020 . As of July 2015 , the generic share reached 58% , up from approximately 55% in July 2014 .
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`With the acquisition of the EPD Business, we have strengthened our position in the Japanese market as we have acquired a wide portfolio of branded
`products that are promoted by our own sales force. The acquired EPD Business is run independently from our strategic collaboration with Pfizer Japan.
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`We also have two manufacturing facilities located in Japan, which play a key role in supplying our businesses throughout the country. Currently, the
`market in Japan is largely composed of hospitals and clinics, but pharmacies are expected to play a greater role as generic substitution, aided by recent pro-generics
`government action, becomes more prevalent.
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`In addition to our operations in India, Australia and Japan, we also have a notable presence in New Zealand and a growing presence in Brazil. In New
`Zealand, we are the largest generics company in the country, with 31.5% of the market
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`share by volume. New Zealand is generally a government tender market where pharmaceutical suppliers can gain exclusivity of up to three years . In New Zealand,
`we have broadened our market presence and profile with the addition of the acquired EPD Business. In Brazil, we operate both a manufacturing platform and a
`commercial business focused on providing high quality generic injectable products to the Brazilian hospital segment. Our sales into this market segment are made
`through distributors as well as through tenders. Brazil is the third largest generic pharmaceutical market in the world, behind the U.S. and combined European
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